Recent reductions in the grid Feed-in Tariff (FiT) offered to owners of renewable-energy generators such as domestic photovoltaic systems are expected to increase demand for efficient and costeffective energy storage. This article by Paul Donaldson, EMEA Sales Director, Future Energy Solutions (a division of Future Electronics) examines the economics of the changes to FiT, and the battery technologies most likely to meet end-users’ storage requirements.
Governments in Europe have significantly reduced Feed in Tariff (FiT) incentives, which previously subsidised owners of residential solar power generation to supply power back to the grid. Owners must now decide whether it is more beneficial to sell power to the grid, or to use the power themselves to reduce the net amount they draw from the grid.
For a residential installation in the UK, the current FiT for each 1kWh generated is around 15p (€0.17). The average cost per kWh of energy used in the home is also typically around 15p. The utility company will pay the Photovoltaic (PV) panel owner around 5p for each 1kWh fed back to the grid. This means the difference of 10p is equal to the profit the utility company makes. In other words, the PV panel owner gains 10p per kWh from storing and using their own solar energy instead of feeding it back to the grid.
A typical 4kWp (16 panels) system in the UK would generate up to 4,000kWh annually. Let us assume 50% of this is sold back to the grid, with the rest used directly at home. This 2,000kWh of exported energy represents £200 of annual return foregone. The return on stored electricity is likely to be even larger in the sunnier southern parts of Europe, as illustrated in Figure 1.
Ideally, for the panels’ owner in the UK, the utility company would pay the equivalent of what it charges them (15p) for the energy exported to the grid. This so called ‘net metering’ is currently available in, for example, the Netherlands, where it covers the home’s total electricity usage up to a maximum of 5,000kWh.
In the absence of net metering, the PV panel owner can avoid feeding in to the grid by installing a battery to store electricity generated during the day for use at night. Figures 2 and 3 compare energy generation and consumption patterns for systems with and without storage.
The typical lifetime of a battery array is around 10 years. With a £200 annual return to be made by avoiding feeding in power to the grid, the battery system must cost less than £2,000 (£200 x 10) to be a worthwhile investment. Unfortunately, large-scale battery prices are still higher than this today. But this could change in the coming three years.
Incentives are one means to boost the uptake of solar storage. On 1 May 2013 Germany introduced low-interest loans to help fund the installation of batteries for PV systems, plus an allowance from the Ministry of Environment to cover 30% of the battery system’s cost. This incentive is available for new residential systems and solar plants of up to 30kW capacity.
Other governments might take a similar approach, since adoption of residential energy storage can help to enhance grid stability and reliability: the thousands of small-scale residential battery systems can help utilities to balance and manage electricity supply and demand more effectively. Incentive schemes such as Germany’s should now encourage investment in the development of advanced storage systems and grid services, as shown in Figure 4.
Advanced battery technologies
Considerable technological innovation is certainly expected in energy storage, yet remarkably the lead-acid battery is today the lowest-cost technology, and is expected to be the most widely used battery in PV systems for much of this decade.
There is, however, growing interest in the use of lithium batteries in the solar sector. Sales of lithium solar-energy storage systems are expected to reach $235m worldwide by 2018. Chinese firms in particular seem likely to drive this market forward, since China’s strength in consumer electronics makes it the world’s most important source of lithium cells.
There must also be a question of whether performance and environmental concerns over the use of Valve-Regulated Lead-Acid (VRLA) batteries will encourage quicker adoption of lithium types. In the VRLA (also known as Sealed Lead-Acid or SLA) battery’s favour is its proven characteristics and low maintenance requirement because, unlike other lead-acid types, the user does not need to periodically add water. It can be mounted on its side and will not leak when properly used. Of low energy density, it is large and heavy, although for residential applications this is seldom an important drawback.
The main limitation of a VRLA battery is that it can only be used to 50% depth of discharge. If it is discharged beyond this, its lifetime is dramatically reduced, typically to less than a year. This will tend to mean that the user will over-specify their system’s capacity to try to ensure that daily usage requirements can be met by no more than 50% of nominal capacity. This tends to dilute the main advantage of VRLA technology: the battery’s low purchase cost.
Lithium-ion battery types are in the region of two to four times more expensive to buy than the lead-acid equivalent today, as shown in Table 1.
|Battery/Pack Specific Energy Wh/kg||30-50||45-80||60-120||120-200||110-190|
|Charge Time (Hrs)||2-5||1||2-3||1-3||0.5-2|
|Average Operating Voltage per Cell||2||1.2||1.2||3.6||3.2|
|Relative Battery/Pack Cost||1x||2x||2-3x||3-4x||2-4x|
This is partly due to the need for sophisticated electronic systems that provide temperature, over-voltage and over-current protection and that manage the charging and discharging processes. The growing popularity of large lithium-ion batteries should yield economies of scale, making them more financially viable in the longer term.
Perhaps the most promising of the lithium battery types is lithium iron phosphate (LiFePO4 or LFP). Today it is very expensive, as there are few suppliers and the manufactured volumes are small. Among several advantages over other technologies, it is inherently safer than traditional cobalt-based lithium-ion, as it cannot release exploding gases, and it is approximately five times lighter than an equivalent lead-acid battery.
These batteries can be cycled (fully charged and discharged) 2,000 times, and can operate down to a very low Depth of Discharge (DoD). For instance, when repeatedly discharged to 80% DoD, the batteries can maintain an average lifetime of 6,000 cycles, offering a typical 3.5 to 4.5 years’ usage in residential PV systems, taking into account the usual environmental considerations such as the operating temperature of the battery.
By contrast, an SLA battery discharged to 70% DoD has a cycle life of 1,200, whereas after a complete discharge the SLA battery’s lifetime is shortened to no more than 300 cycles.
In the short term, lead-acid batteries are rightly forecast to be the dominant type in use in solar storage applications. For environmental reasons, however, and because of short cycle life, low energy density and excessive weight, lead-acid seems sure to be phased out in the next few years.
The economic case for small PV installations to use energy storage to enable self-consumption, rather than feeding electricity in to the grid, becomes stronger every year as both FiTs and the cost of batteries fall. In the medium term, Future Energy Solutions’ prediction is that the LiFePO4 battery type will replace lead-acid as the preferred technology because of its superior performance and safety.
Future Energy Solutions provides battery solutions from UPG and NorthStar, PV modules from EMMVEE and charge controllers from Morningstar. The local field technical marketing teams of Future Energy Solutions can provide help on the implementation of on- or off-grid solar applications.